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This Great Graphic, created on Bloomberg, shows the euro-yen (white line) and dollar-yen (yellow line) over the past three months indexed to April 1. What it seems to show is that euro-yen has been leading dollar-yen. The euro tends to peak and bottom before the dollar does against the yen. This is particularly noteworthy because the euro is has…

Great Graphic: Is Euro-Yen Telling Us Something about Dollar-Yen?
Reviewed by Marc Chandler
on
June 30, 2014
Rating: 5

(from my colleague Dr. Win Thin)EM currencies have firmed over the past week, confirming our view that the global backdrop remains supportive for risk appetite. There is some negative headline risk from Argentina (see below) as well as general geopolitical tensions in the Middle East, but risk sentiment has generally held up well and has recovered…

The low volatility of the capital markets should not be confused
with high confidence by investors at the moment. The outlook for the US economy has been
clouded by the unexpectedly large drop in Q1GDP and weak real consumption in
April and May. There is great uncertainty over the world's second largest
economy and the extent that the weakne…

The Week Ahead is about Clarity
Reviewed by Marc Chandler
on
June 29, 2014
Rating: 5

The constructive outlook for the US dollar was predicated on two beliefs. First that growth and interest rate differentials favored the US over the euro area and Japan. Second that this would be the key driver in the foreign exchange market. The nearly 3% contraction of the US economy in Q1 (at an annualized pace) is simply shocking. It has shak…

Currency Positioning and Technical Outlook: Dollar Shakes, but will it Break?
Reviewed by Marc Chandler
on
June 28, 2014
Rating: 5

Check out this Cool Video; a compelling five minute articulation of a vision to cover various surfaces, like roads, driveways, parking lots with solar panels. It pulls together various technologies that already exist. Some critics worry about the materials to be used, or the efficiency of photovoltaic cells or the practicality of covering road…

German consumer prices rose more than expected in June. This was immediately reflected in the recovery of the euro from the session lows toward the highs, albeit within the narrow quarter cent range. The preliminary EU harmonized measure rose 0.4%, twice what consensus expected. That helped lift the year-over-year rate to 1.0% from 0.6%. In tu…

German Inflation Ticks Up: Implications for EMU and ECB
Reviewed by Marc Chandler
on
June 27, 2014
Rating: 5

This Cool Video is the second part of my interview with Erin Ade on Boom Bust program on RTV.Edward Harrison of Credit Writedowns is anchoring this segment. For full disclosure, Ed has been very helpful in helping me navigate the social media, and his own efforts have been an inspiration. We discuss what the ECB is doing and the dollar-bloc a bi…

Cool Video: Second Part of Boom Bust Interview
Reviewed by Marc Chandler
on
June 27, 2014
Rating: 5

Most of the major currencies are little changed against the dollar today. The yen is the main exception. The greenback appears poised to finished the week below the 200-day moving average against the yen for the first time since late 2012 (~JPY101.70). The main impetus does not appear to be coming from Japan but from the drop in US Treasury yie…

(from my colleague Dr. Win Thin)
1) The Australian Bureau of Meteorology softened its forecast for El Niño
2) China stocks rose as the first IPOs in four months were well-received
3) Czech central bank said the koruna cap won’t be scrapped before Q2 2015
4) Russian lawmakers rescinded authority for him to use force in Ukraine
5) South Africa’s pla…

Emerging Markets: What Has Changed
Reviewed by Marc Chandler
on
June 26, 2014
Rating: 5

This Great Graphic, posted by Sumit Roy on Hard Assets, is based on data from the US Energy Information Administration. It shows the surge in US crude oil exports. They totaled more than 250k barrels a day in April, a 15-month high or about 3% of the 8.2 mln barrels a day produced in the US in March. Ironically, US has banned crude oil exports …

Great Graphic: US Crude Oil Exports Fifteen Year Highs, but....
Reviewed by Marc Chandler
on
June 26, 2014
Rating: 5

The US dollar is mixed. The dollar-bloc currencies remain firm, led by New Zealand dollar and prospects of more RBNZ tightening. The US dollar is threatening to fall through the CAD1.07 level and head toward the next target seen near CAD1.0650. For its part, the Aussie is flat, just above $0.9400, but is resilient in the face of Moody's warn…

On Thursday, the US Department of Commerce will publish the May estimate of personal consumption expenditure deflator. Last week, investors learned that the consumer price index rose at its fastest rate in two years. Since extraordinary monetary policy measures were taken, some observers have warned of inflation risks lurking around every corne…

Refresher: CPI and the PCE Deflator
Reviewed by Marc Chandler
on
June 25, 2014
Rating: 5

The economies of most high income countries remains below the pre-crisis peaks. The US, Germany, and it now appears, the UK, are the notable exceptions. On the eve of the EU summit, there continues to be a debate over fiscal policy.

The rise of anti-EU parties in the European parliament election has strengthening calls to permit even more flexibi…

Great Graphic: Austerity and Employment
Reviewed by Marc Chandler
on
June 25, 2014
Rating: 5

The foreign exchange market is becalmed. No, seriously. The euro has been confined to less than a 20 pip range (1/5 of a penny), and the dollar has not moved out of a 15 tick range against the yen (about 1/1000 of a penny). Sterling is in a somewhat larger range (~35 pips) as the market tries to make sense of the so-called time inconsistencies …

Erin Ade of RTV interviewed me yesterday for her Boom Bust show. We touched on various issues, including sterling, which I cautioned against chasing, preferring to look for a pullback.
There is also an interview here with Marshall Auerback (Director of the Institute for New Economic Thinking) on Hyman Minski. Click here for the video on Hulu o…

There are two big issues for the EU heads of state meeting at the end of this week: A review of the fiscal plans and structural reforms of member countries and the appointment of the EC President, following the recent EU parliamentary elections. To the chagrin of many observers, especially in Berlin, the attempt some countries, like France and I…

This Great Graphic, drawing on from the CIA's World Factbook, and Chinese government data, was published by the Wall Street Journal. It shows that China's two largest cities, Shanghai and Beijing have populations that rival countries.

Shanghai, for example, with 24 mln people, has edged above the population of Australia. Beijing, with…

The emphasis on central bank forward guidance always seemed like shaky ground to rest monetary policy. After all, central bankers always tried to influence investor expectations. However, as the UK is amply demonstrating, what is euphemistically called "time inconsistency" may limit its effectiveness. Sterling has been hit by a wave o…